There have been calls for more tax cuts and greater spending after an expected downturn after Britons voted to leave the EU in June failed to materialise, with the UK set to grow by 2 per cent this year.

But Mr Hammond accused people calling for him to use some of the estimated £60billion generated from this extra growth for a major injection of cash into the economy and services as "reckless".

He told the BBC's Andrew Marr Show: “It's not money in the wallet because we are borrowing a huge amount of money.

“If your bank increases your credit card limit, I don't think you feel obliged to go out and spend every last penny of it immediately."

Mr Hammond said he saw his role as ensuring “that we have got reserves in the tank, so as we embark on the journey that we will be taking over the next couple of years, we are confident that we have got enough gas in the tank to see us through that journey”.

In Wednesday’s Budget, Mr Hammond signalled in that he would find as much as £1.3billion to local authorities pay for social care, as well as ordering another review of social care.

Mr Hammond said there would be money for “dealing with short term disparities between areas that are coping well at present and areas that struggling” but said “we have to look at the differences there”.

Signalling a wider review of care funding, Mr Hammond added: “There is a case for taking a longer term view to fund a service that is linked to the ageing demographic of the population.”

Mr Hammond will set out details of a new £300million fund to help shops and pubs – mainly in the south east – to cope with next month’s sharp rise in business rates.

Mr Hammond will also announce a major review of business rates which could see small high street shops and pubs given permanent discounts to stop them closing.

One source said: “There will be money for the smallest businesses which face the cliff edge and money for local authorities so they can pick the other hard cases. This is brand new money which will help the hardest hit.

“The Chancellor’s sympathy is not with big supermarkets. He is really taken with the idea that the tax on property is not fit for the 21st century.”

The cash is on top of a £3.6billion transitional relief fund set up to help small companies hit by the increase in business rates.

The focus of the Budget

The Chancellor spoke of the importance of tackling productivity and skills training in the Budget and played down the idea that there would be giveaways and exciting new policies.

He said he has two agendas: to build an economy that works for everyone and to focus on the country's global future after Brexit.

Training and upskilling is a "priority", he said.

Philip Hammond insists the UK has a 'fighting spirit'Credit:
Reuters

Asked about the extra money the Chancellor is reportedly sitting on as a result of tax receipts being better than expected, he said: "It's not money in the wallet because we're borrowing an awful lot of money.

"We're spending over £50 billion a year just on servicing the interest on our debt."

He added that his job is to ensure that there are "reserves in the tank" and told Andrew Marr he will instead ensure that "we've got enough gas in the tank to see us through that journey... that seems like a sensible approach."

Brexit bill

Mr Hammond said the UK would honour any obligations it has post-Brexit, but he also warned the country will not "slink off" if a deal is not secured.

He threw his weight firmly behind Theresa May's belief that no deal is better than a bad deal and said the UK has a "fighting spirit" and would do whatever it takes to remain competitive.

Asked about a possible Brexit bill, he said: "We're about to enter into a negotiation, very often when you're about to start a negotiation with people they set out very large demands and very stark positions ahead of that.

EU flagCredit:
Alamy

"The PM has been clear we are a nation that honours our obligations and if we do have any bills that fall to be paid we will obviously deal with them."

He added: "If there's anybody in the EU who thinks that if we don't do a deal with the EU, if we don't continue to work closely together Britain will slink off as a wounded animal, that is not going to happen.

"Britain has a fighting spirit and we will fight back.

"We will do whatever we need to do to make this country competitive."

New 'T Levels'

Mr Hammond will also unveil “radical” plans to put technical education on an equal footing with academic studies in the biggest overhaul of post-16 education in 70 years.

The current system, in which students have to pick from 13,000 different qualifications, will be replaced with just 15 standalone courses.

Teenagers who undertake the technical training, such as courses to become an engineer or builder, will spend 50 per cent longer learning than they do now, equalling 900 hours of teaching a year. Click here for the full story.

What else could he say?

Housing

Theresa May, the Prime Minister, has indicated that the Government will do more to support renters in the latest Budget by building more affordable rental properties.

Previous policies, such as Help to Buy, were focused on supporting home ownership.

Income tax

The personal allowance is due to rise to £11,500 this April, while the higher rate threshold will rise to £45,000. The increases form part of the Government's pledge to raise the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of the decade.

Mr Hammond could announce the path of future increases in this Budget.